A lucrative lure.

International companies are lining up to enter Iran's lucrative oil and gas sector even though US sanctions against Teheran continue to be in effect. The Deputy Oil Minister for International Relations, Sayyed Mehdi Husseini, said in London last November that the response to an offer made by the state-owned National Iranian Oil Company (NIOC) has been so favourable than another five projects are being tendered immediately. This brings the total number of projects available, both on- and offshore, up to 47.

More than 90 foreign companies submitted prequalification bids for the schemes, Husseini revealed. French, Italian, UK and Canadian companies, including Elf Acquitaine, Agip, Premier Oil and Bow Valley Energy, have also won awards from a list of 11 projects first offered in 1995. They include the big offshore Doroud oil field, where Elf and Agip have agreed to invest $600 million in a "buy-back" arrangement whereby the companies will recover their costs and profit once production begins. Altogether, some $8 billion is expected to be invested in the latest projects.

Potential participants from the US were encouraged by President Bill Clinton's call for reconciliation in August, a move that could herald an end to American sanctions against the Islamic Republic. The favourable response is also fuelling expectations that Iran will become the favoured route for exporting the huge oil and gas wealth of the Caspian Sea and Central Asia.

The projects were presented to more than 500 oil executives and investors from more than 30 countries, including representatives of the big international companies such as Mobil, Shell and BP, at a three-day seminar held in London during the summer. Farah Rahimi, Iran's Minister of International Affairs said they involve both exploration of new fields and schemes aimed at pumping more oil from the country's existing, but ageing, fields.

Officials of NIOC said earlier that more than 20 billion barrels of oil could be found to supplement the Islamic Republic's existing reserves of 93 billion barrels, a figure which makes Iran the fifth largest oil nation in the world.

Its proven natural gas reserves are even more substantial, amounting to 742 trillion cubic feet -the second largest in the world (behind Russia) - and the government is eager to use these to step up exports to countries such as India and China.